MIRA INFORM REPORT

Report Date :

16.02.2011

IDENTIFICATION DETAILS

Name :	DANAPHA PHARMACEUTICAL JOINT STOCK COMPANY
Registered Office :	No. 253, Dung Si, Thanh Khe Str – Thanh Khe District – Da Nang City – Vietnam
Country :	Vietnam
Financials (as on) :	30.09.2010
Year of Establishment :	1965
Com. Reg. No.:	0400102091
Legal Form :	Joint Stock Company
Line of Business :	manufacturing and trading pharmaceutical products

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
Vietnam	b1	b1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

SUBJECT IDENTIFICATION & LEGAL FORM

Current legal status
English Name	DANAPHA PHARMACEUTICAL JOINT STOCK COMPANY
Vietnamese Name	CONG TY CO PHAN DUOC DANAPHA
Short name	DANAPHA
Type of Business	Joint stock company
Year Established	1965
Business Registration No.	0400102091
Date of Registration	14 Sep 2010
Place of Registration	Department of Planning and Investment of Da Nang City
Current registered capital	62,000,000,000 VND
Status	Unlisted
Tax code	0400102091
Total Employees	380

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Type of Business: State Owned Company Changed to: Joint Stock Company	20 Dec 2006
2	Subject has got former registered capital: VND 37,500,000,000 Changed to: VND 50,000,000,000	24 Sep 2008
3	Subject has got former Business registration No. 3203001246 Changed to: 0400102091	14 Sep 2010
4	Subject has got former Registered capital: VND 50,000,000,000 Changed to: 62,000,000,000	14 Sep 2010

company ADDRESSES

Head Office
Address	No. 253, Dung Si, Thanh Khe Str – Thanh Khe District – Da Nang City – Vietnam
Telephone	(84-511) 3760126
Fax	(84-511) 3760127
Email	info@danapha.com
Website	www.danapha.com
Branch in Ha Noi
Address	No. 6, Quarter N2, 89 Nguyen Van Troi Str – Thanh Xuan District – Ha Noi City – Vietnam
Telephone	(84-4) 35565864/ 3664 7358
Fax	(84-4) 35565865/ 3664 7357
Branch in Ho Chi Minh
Address	No. DD 26 Bach Ma Str – Ward 15 – 10 District – Ho Chi Minh City – Vietnam
Telephone	(84-8) 3970 8129
Fax	(84-8) 3970 8127
Branch in Thanh Hoa
Address	Lot 28 Ba Trieu Str – Dong Tho Ward – Thanh Hoa City – Thanh Hoa Province – Vietnam
Branch in Da Nang
Address	No. 149 Hai Phong – Hai Chau District – Da Nang City – Vietnam

SUBSIDIARIES AND RELATED COMPANIES

1. PARENT COMPANY – VIETNAM PHARMACEUTICAL CORPORATION
Business Registration	0106001031
Date of Registration	16 Dec 2008
Place of Registration	Ha Noi City Department of Planning and Investment
Registered Capital	269,629,776,752 VND
Tax code	0100109385
Address	No.138B Giang Vo Str – Ba Dinh District – Ha Noi City – Vietnam
Tel	(84-4) 3844 3153/ 3844 3151
Fax	(84-4) 3844 3665
Website	http://www.vinapharm.net.vn

DIRECTORS

1 . NAME	Mr. NGUYEN QUANG TRI
Position	General Director
Date of Birth	22 Feb 1958
ID Number/Passport	201241379
Resident	No. 153 Trieu Nu Vuong – Hai Chau District – Da Nang City – Vietnam
Current resident	No. 85 Le Loi Str – Hai Chau District – Da Nang City – Vietnam
Nationality	Vietnamese
2 . NAME	Mr. MAI DANG DAU
Position	Vice General Director
Resident	Tho Quang Ward – Son Tra District – Da Nang City – Vietnam
Nationality	Vietnamese
3 . NAME	Ms. NGUYEN THI SON
Position	Vice General Director
Nationality	Vietnamese
4 . NAME	Ms. NGUYEN THI VAN THO
Position	Vice General Director
Date of Birth	30 Aug 1960
Resident	No. 75 Le Lai – Hai Chau District – Da Nang City – Vietnam
Nationality	Vietnamese
Tel/Mobil phone	(84-511) 3760128
Email	vantho@danapha.com

BUSINESS NATURE AND ACTIVITIES

The subject is specialized in manufacturing and trading pharmaceutical products.

IMPORT & EXPORT ACTIVITIES

IMPORT:
· Market	China, Thailand, India, France, Singapore etc.
· Mode of payment	T/T, L/C, D/A
Notes: The main import market is Singapore
EXPORT:
· Market	The subject’s products are exported to Russia and SNG Countries, etc.
· Mode of payment	T/T, L/C, D/A
Notes: The main export market is Russia

BANKERS

1. JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM DA NANG BRANCH
Address	No 40 Le Loi, Hai Chau I ward – Hai Chau District – Da Nang City – Vietnam
Telephone	(84-511) 3817441
Fax	(84-511) 3826062
Foreign Currency Account	004.137.00.12126 (USD)
VND Account	004.0000.00844 (VND)
2. VIET NAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE DA NANG BRANCH
Address	No.172 Nguyen Van Linh – Thanh Khe District – Da Nang City – Vietnam
Telephone	(84-5113) 2691345

SHAREHOLDERS

1 . NAME	Mr. NGUYEN QUANG TRI
Position	General Director
Date of Birth	22 Feb 1958
ID Number/Passport	201241379
Issued on	14 Sep 2006
Issued Place	Da Nang Police Department
Resident	No. 153 Trieu Nu Vuong – Hai Chau District – Da Nang City – Vietnam
Nationality	Vietnamese
Number of Shares	1,749,675
Notes: Shareholding representative of VIETNAM PHARMACEUTICAL CORPORATION
2 . NAME	Ms. NGUYEN THI VAN THO
Position	Vice General Director
Date of Birth	30 Aug 1960
Resident	No. 75 Le Lai – Hai Chau District – Da Nang City – Vietnam
Nationality	Vietnamese
Number of Shares	1,166,450
Notes: Shareholding representative of VIETNAM PHARMACEUTICAL CORPORATION
3 . NAME	Ms. HO THI BICH HUONG
Date of Birth	01 Jan 1950
Resident	No. 20/6, Ly Tu Trong Str – Hai Chau District – Da Nang City – Vietnam
Nationality	Vietnamese
Number of Shares	8,895
4 . NAME	Mr. MAI DANG DAU
Position	Vice General Director
Resident	Tho Quang Ward – Son Tra District – Da Nang City – Vietnam
Nationality	Vietnamese
Number of Shares	5,905
5 . NAME	Mr. PHAM KHAC HA
Resident	D204 My Phuoc, Phu My Hung – Ho Chi Minh City – Vietnam
Nationality	Vietnamese
Number of Shares	2,000

FINANCIAL DATA

BALANCE SHEET
I: One VND
Balance sheet date	30/09/2010	31/12/2009	31/12/2008
Number of weeks	-	52	52
ASSETS
A – CURRENT ASSETS	178,535,545,146	138,189,008,447	103,983,642,886
I. Cash and cash equivalents	33,702,863,655	20,232,496,289	14,567,539,555
1. Cash	33,702,863,655	18,932,496,289	10,876,445,386
2. Cash equivalents	0	1,300,000,000	3,691,094,169
II. Short-term investments	6,588,711,983	907,268,655	2,037,240,000
1. Short-term investments	6,588,711,983	0	2,037,240,000
2. Provisions for devaluation of short-term investments	0	0	0
III. Accounts receivable	81,318,391,491	67,058,704,161	43,721,019,413
1. Receivable from customers	55,246,903,582	46,168,082,193	40,912,062,721
2. Prepayments to suppliers	24,687,809,078	17,954,943,704	994,563,817
3. Inter-company receivable	0	0	0
4. Receivable according to the progress of construction	0	0	0
5. Other receivable	1,383,678,831	2,935,678,264	1,814,392,875
6. Provisions for bad debts	0	0	0
IV. Inventories	52,800,935,289	49,863,731,009	43,349,195,486
1. Inventories	52,800,935,289	49,863,731,009	43,349,195,486
2. Provisions for devaluation of inventories	0	0	0
V. Other Current Assets	4,124,642,728	126,808,333	308,648,432
1. Short-term prepaid expenses	0	0	0
2. VAT to be deducted	2,406,191,817	123,374,224	70,912,847
3. Taxes and other accounts receivable from the State	3,434,109	3,434,109	56,667,756
4. Other current assets	1,715,016,802		181,067,829
B. LONG-TERM ASSETS	63,759,864,855	40,899,133,975	40,205,605,475
I. Long term account receivable	0	0	0
1. Long term account receivable from customers	0	0	0
2. Working capital in affiliates	0	0	0
3. Long-term inter-company receivable	0	0	0
4. Other long-term receivable	0	0	0
5. Provisions for bad debts from customers	0	0	0
II. Fixed assets	49,797,830,605	35,757,099,725	34,931,688,567
1. Tangible assets	35,632,160,133	33,962,320,708	34,931,688,567
- Historical costs	80,428,599,379	74,017,857,654	68,790,089,585
- Accumulated depreciation	-44,796,439,246	-40,055,536,946	-33,858,401,018
2. Financial leasehold assets	0	0	0
- Historical costs	0	0	0
- Accumulated depreciation	0	0	0
3. Intangible assets	0	0	0
- Initial costs	0	0	0
- Accumulated amortization	0	0	0
4. Construction-in-progress	14,165,670,472	1,794,779,017
III. Investment property	0	0	0
Historical costs	0	0	0
Accumulated depreciation	0	0	0
IV. Long-term investments	13,820,000,000	5,000,000,000	5,000,000,000
1. Investments in affiliates	0	0	0
2. Investments in business concerns and joint ventures	8,820,000,000	0	0
3. Other long-term investments	5,000,000,000	0	5,000,000,000
4. Provisions for devaluation of long-term investments	0	0	0
V. Other long-term assets	142,034,250	142,034,250	273,916,908
1. Long-term prepaid expenses	142,034,250	142,034,250
2. Deferred income tax assets	0	0	0
3. Other long-term assets	0	0	273,916,908
TOTAL ASSETS	242,295,410,001	179,088,142,422	144,189,248,361
LIABILITIES
A- LIABILITIES	89,508,517,434	66,273,481,802	49,018,091,672
I. Current liabilities	58,187,901,835	55,434,867,643	43,953,073,956
1. Short-term debts and loans	8,302,261,230	6,394,231,984	5,138,506,450
2. Payable to suppliers	20,161,061,323	18,684,301,614	18,210,194,874
3. Advances from customers	100,000,000	102,513,700	318,852,725
4. Taxes and other obligations to the State Budget	729,553,166	2,179,227,120	328,223,336
5. Payable to employees	2,389,215,106	5,922,383,638	3,230,536,694
6. Accrued expenses	2,776,890,739	1,118,753,760	280,120,500
7. Inter-company payable	0	0	0
8. Payable according to the progress of construction contracts	0	0	0
9. Other payable	23,728,920,271	21,033,455,827	16,446,639,377
10. Provisions for short-term accounts payable	0
II. Long-Term Liabilities	31,320,615,599	10,838,614,159	5,065,017,716
1. Long-term accounts payable to suppliers	0	0	0
2. Long-term inter-company payable	0	0	0
3. Other long-term payable	0	0	0
4. Long-term debts and loans	31,267,343,771	10,698,511,555	5,012,071,114
5. Deferred income tax payable	0	0	0
6. Provisions for unemployment allowances	53,271,828	140,102,604	0
7. Provisions for long-term accounts payable	0	0	52,946,602
B- OWNER’S EQUITY	152,786,892,567	104,019,834,337	95,171,156,689
I. OWNER’S EQUITY	153,140,777,651	103,032,896,636	94,254,502,738
1. Capital	62,000,000,000	50,000,000,000	50,000,000,000
2. Share premiums	0	36,500,000,000	36,500,000,000
3. Other sources of capital	58,100,000,000	0	0
4. Treasury stocks	0	0	0
5. Differences on asset revaluation	0	0	0
6. Foreign exchange differences	0	500,732,516	0
7. Business promotion fund	13,546,583,958	13,546,583,958	6,231,441,341
8. Financial reserved fund	2,485,580,162	2,485,580,162	1,523,061,397
9. Other funds	0	0	0
10. Retained earnings	17,008,613,531	0
11. Construction investment fund	0	0	0
II. Other sources and funds	-353,885,084	986,937,701	916,653,951
1. Bonus and welfare funds	-353,885,084	986,937,701	916,653,951
2. Sources of expenditure	0	0	0
3. Fund to form fixed assets	0	0	0
MINORITY’S INTEREST	0	8,794,826,283	0
TOTAL LIABILITIES AND OWNER’S EQUITY	242,295,410,001	179,088,142,422	144,189,248,361

PROFIT & LOSS STATEMENT
Description	9 months of FY2010	FY2009	FY2008
1. Total Sale	138,764,227,645	168,729,269,960	149,317,044,517
2. Deduction item	1,203,577,917	655,274,899	1,440,440,137
3. Net Sale	137,560,649,728	168,073,995,061	147,876,604,380
4. Costs of goods sold	73,139,749,336	93,369,864,800	93,477,078,414
5. Gross profit	64,420,900,392	74,704,130,261	54,399,525,966
6. Financial income	1,565,969,637	911,568,374	1,267,338,657
7. Financial expenses	4,119,724,214	2,424,924,536	3,071,751,900
- In which: Loan interest expenses	3,871,386,041	0	0
8. Selling expenses	26,709,222,931	32,396,363,720	28,074,197,572
9. Administrative overheads	15,665,438,260	18,889,778,506	13,545,359,577
10. Net operating profit	19,492,484,624	21,904,631,873	10,975,555,574
11. Other income	10,161,811	213,419,650	251,956,520
12. Other expenses	64,230,922	54,899,846	31,553,078
13. Other profit /(loss)	-54,069,111	158,519,804	220,403,442
14. Total accounting profit before tax	19,438,415,513	22,063,151,677	11,195,959,016
15. Current corporate income tax	2,429,801,982	2,864,151,302	0
16. Deferred corporate income tax	0	0	0
17. Profit after tax	17,008,613,531	19,199,000,375	11,195,959,016

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	9 months of FY2010	FY2009	FY2008	Average Industry
Current liquidity ratio	3.07	2.49	2.37	2.06
Quick liquidity ratio	2.16	1.59	1.38	1.33
Inventory circle	1.39	1.87	2.16	3.96
Average receive period	215.77	145.63	107.92	128.92
Utilizing asset performance	0.57	0.94	1.03	1.22
Liability by total asset	36.94	37.01	34.00	56.56
Liability by owner equity	58.58	63.71	51.51	344.11
Ebit / Total asset (ROA)	9.62	12.32	7.76	9.12
Ebit / Owner’s equity (ROE)	15.26	21.21	11.76	15.93
Ebit / Total Sale (NPM)	16.80	13.08	7.50	7.52
Gross profit / Total Sale (GPM)	46.42	44.27	36.43	24.83
Note: The Average Industry was calculated by Vietnam Credit based on our owned statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Good
Liquidity	High
Payment status	Above Average
Financial Situation	Above Average
Development trend	Positive
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	L/C, D/A, TT
Sale Methods	Wholesaler

CREDIT INQUIRY: 125,000 USD against DA in terms

Acceptable

INTERPRETATION ON THE SCORES

The subject was established in 1965 as State Company. Formerly, the subject’s name was TW5 Pharmaceutical Enterprise. It is subsidiary of Vietnam Pharmaceutical Corporation. At the end of 2006, the subject has transformed into Joint Stock Company according to decision No. 2402/QD-BYT by Ministry Of Health Portal with name Danapha Pharmaceutical Joint Stock Company. On 14th September 2010, the subject has changed business registration into tax code No. 0400102091 and increased registered capital from VND 50 billion to VND 62 billion. Its total employee is 380 persons.

Head office of the subject is located at No. 253, Dung Si, Thanh Khe Street, Thanh Khe District, Da Nang City. It has got four branches in Ha Noi City, Thanh Hoa City, Ho Chi Minh City and Da Nang City.
The subject is specialized in manufacturing and trading pharmaceutical products. With over 45 years of operation, the subject is rich in human resources has professional standards and the ability to apply progressive technologies. System of Quality Management of the subject has been built based on the interaction of systems ISO 9001:2000, WHO-GMP, GLP and GSP. Moreover, Danapha trademark was elected as “High Quality Vietnam Products” by consumers for many years and “Dat Viet Gold Star Award" was award which was the award achieved by Danapha in two continuous years (2005-2006). The subject imports material and product from Singapore, China, Thai Lan etc and exports product to Russia and SNG Countries.

According financial data, total asset increased from VND 144,189,248,361 in 2008 to VND 179,088,142,422 in 2009. Total sale rose from VND 149,317,044,517 in 2008 to VND 168,729,269,960 and profit after tax also increased from VND 11,195,959,016 to VND 19,199,000,375. In 9 first months 2010, business result of the subject was rather good. Total asset was VND 242,295,410,001, 35 percent higher than 2010. Total sale reached VND 138,764,227,645 and profit after tax was VND 17,008,613,531. This is bright result. Financial ratios were fairly good. Liquidity ratios were higher than average industry, reflex ability pay debt and change asset into cash well than industry. Operation ratio and financial leverage were lower than average industry but satisfactory. Profitability ratio of the subject was good, ROA, ROE, NPM, GPM were higher average industry.

In general, operation of the subject seems busy. Financial situation is above average. Its facilities and management capabilities are good. Future prospect seems bright. It is capable to meet small and medium commitments.

APPENDIXES

INDUSTRY DATA
Industry code	Growth speed (%)		Total employees 2009 (Thousand)		Total enterprises	Annual average capital of enterprises
	Predict 2010	2009
Agriculture, Forestry and Fishing	2.8	3.0	24,788.5		2,399	50,530
Trade and Services	7.5	11	10,517.9		79,181	1,754,973
Construction	7	11.3	2,692.8		17,783	248,268
Manufacturing	12	7.6	7,591.2		30,786	967,068
ECONOMIC INDICATORS
			2009	2008		2007
Population (Million person)			87	86.1		85.1
Gross Domestic Products (US$ billion)			91	84.9		71.2
GDP Growth (%)			5.32	6.2		8.5
GDP Per Capita (US$)			1,080	1,040		814
Inflation (% Change in Composite CPI)			6.88	24.4		8.3
SERVICE TRADE PERFORMANCE
Billion USD			2009	2008		2007
Exports			56.6	62.9		48.6
Imports			68.8	76.6		58.9
Trade Balance			-12.2	-14.6		-10.3

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.50
UK Pound	1	Rs.73.07
Euro	1	Rs.61.63

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.